TAXPAYERS were on track for a $667 billion debt bomb if Labor's policies and spending was left unchecked over the next decade, budget papers reveal.

Treasurer Joe Hockey today unveiled the state of the nation's finances in Canberra, uncovering the massive debt legacy Labor was on track to deliver.

The Midyear Economic and Fiscal Outlook showed without "remedial action" and significant savings debt would blow out by to close to $700 billion - or around 26 per cent of GDP - by 2022-23.

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As revealed by The Daily Telegraph earlier in the week the budget deficit for 2013-14 has increased from $30 billion in the Pre-Election Economic and Fiscal Outlook (PEFO) to $47 billion and budget deficits totalling $123 billion are expected over the forward estimates.

The blowout for this financial year equates to around 3 per cent of GDP.

"Without policy change and taking no remedial action, budget deficits would be projected in each and every year to 2023-24," the MYEFO states.

Unemployment is on track to rise and wage growth will decline, resulting in a downward trend in consumer confidence and a hit to the budget bottom line.

By 2015 the unemployment rate is due to increase from the current 5.8 per cent to 6.25 per cent.

Real and nominal GDP growth will face a "substantial deterioration", according to the documents.

Tax receipts will also take a $37 billion hit over the next four years, resulting in the decline in nominal GDP.

Real GDP is forecast to grow at the slower rate of 2.5 per cent in 2014-15 compared to the predicted 3 per cent just several months ago.

The end to the resources boom will also take a hit with the decline now "steeper" than it was in the PEFO.

The transition from resources to non-resources drivers of growth would be "unlikely to be seamless".

But despite the challenges, the government said it was determined to return the budget to "sustainable surpluses" which would build to 1 per cent of GDP by 2023-24.

Revealing the MYEFO during a speech to the National Press Club in Canberra Mr Hockey said that the Coalition was "determined to fix the problems we inherited".

"We have inherited from the Labor Party Budget deficits totalling $123 billon over the next four years and unless we take action the Budget will be in deficit for at least a decade," Mr Hockey said.

Mr Hockey said Treasury was working hard on producing a Budget in May that would put the nation's economy back on track.

"We will fix the budget, we will deliver a stronger economy," he said.

In the MYEFO document the government said it had taken "essential steps" already to address the damage left by Labor, including giving $8.8bn to the Reserve Bank, addressing a $1.2 billion shortfall in border protection, restoring $1.2 billion education spending and addressing $2.9 billion in unlegislated tax and superannuation measures.

A total of $998 million in cuts to Labor's trade training centres and the axing of a community infrastructure program worth $528 million will pay for the extra $1.2 billion for schools funding.

The removal of the carbon tax was expected to "lower headline and underlying inflation by less than 1/4 of a percentage point in 2014-15.

But the ultimate cost to taxpayers of removing the levy would be $7.3 billion over the forward estimates. News_Image_File: Flagging changes to Disability Insurance Scheme ... Finance Minister Mathias Cormann.

"The removal of the carbon tax is also expected to support household consumption growth in the short term and make a small contribution to national income growth over the longer term," the MYEFO stated.

Mr Hockey said it gave him "no pleasure" to realise that the task the Coalition faced to bring the budget into line had grown.

"Every area of government had its surprises," he said.

"We will not leave budget problems for another day ... knowing the truth means we can get on with building investment.

"We are absolutely determined to get the economy moving again."

But he refused to say when the Coalition would be able to get the budget back into surplus.

"I am not going to make the same mistake Wayne Swan did 350 times," he said.

Mr Hockey's refusal to name when he would deliver a surplus comes despite a previous promise to get the budget back in the black by 2016-17.

Revenue writedowns for this year hit $16.8 billion according to the MYEFO numbers, contributing to the larger debt for this financial year.

Over the four year period to 2016-17 gross debt is due to hit $460 billion, much larger than previously anticipated.

Finance Minister Mathias Cormann also said that there could be changes to the way the National Disability Insurance Scheme is funded.

"Every figure that Joe Hockey quoted today claiming that it was a legacy of the Labor government included his own actions," Mr Burke said.

"In 101 days they have added $160 million a day to the deficit.

"These are the same people who spent years railing against the deficit … the claim they would be a government of no excuses is now in tatters."

Mr Bowen said while he would not use the "recession" word, he believed there was a concern that the timing of the release of MYEFO so close to Christmas could impact consumer confidence.

"We do have to be very careful about the impact it has on consumer confidence," Mr Bowen said.

"When Australians get the sort of language they are getting from their government at the moment it could impact confidence and that is concerning." News_Image_File: 'No excuses government' tag in tatters ... Opposition Finance Spokesperson Tony Burke.

This morning, Mr Bowen said reports the deficit had grown from $30 billion to close to $50 billion since the election was completely of the Coalition's own making despite assertions to the contrary by the government.

Mr Bowen said Mr Hockey was using "1970s tricks" to fool the public into believing Labor had ruined the economy and today's release of the MYEFO (Mid Year Economic and Fiscal Outlook) document should not be painted as a last Labor budget.

"For the Prime Minister and Treasurer to somehow paint this as the last budget statement, some sort of overhang of the last government is completely wrong and pathetic spin," Mr Bowen told ABC radio.

The shadow treasurer said the government had been "spending very hard" since September 7, including giving $8.8bn to the Reserve Bank.

"The issue is the government has given this money to the Reserve Bank in what I think is a pretty transparent attempt to make this year's budget deficit worse so that the Reserve Bank may be in a position to pay dividends back in this year and following years to make their budget bottom lines look better," Mr Bowen said.

"It's a sort of 1970s trick which I thought modern day treasurers were over."News_Image_File: 'These are truth tactics' ... Australian Prime Minister Tony Abbott. Picture: AFP PHOTO / Saeed KHAN

He said there would likely be a pre-Christmas downturn in confidence and spending as a result of today's statement.

"I think that is going to be a problem," Mr Bowen said.

But Prime Minister Tony Abbott today denied the Coalition was using "scare tactics" over the state of the economy.

"These are truth tactics," the Prime Minister said from Balgowlah in his own northern Sydney electorate this morning.

He said today's release of the MYEFO would fully expose the mess Labor had left behind.

"What we will see today is the sad truth that six years of Labor fiscal profligacy has given us cumulative deficits in order of a quarter of a trillion dollars," Mr Abbott said.

"The repair job started from day one obviously with the election of the new government but it accelerates from today given that we will see the full extent of Labor's debt and deficit disaster."

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